Self-Checkout System Spending Soars to $475 Billion

Language difficulties is one of several factors behind a 47 percent increase from 2005.

American consumersespecially frequent fliersare becoming quite comfortable with self-checkout systems, to the tune of a projected $475 billion in self-checkout purchases this year, according to a new study from IHL Consulting Group.
Thats a 47 percent increase over what IHL recorded last year, and the consulting company is predicting the sharp increases will continue, with a projected $1.2 trillion in self-checkout sales projected by 2009.
What makes the $1.2 trillion projected sales even more impressive, according to IHL President Greg Buzek, is that the survey excludes gasoline sales.

Pay-at-the-pump would have otherwise dramatically increased the reported numbers, especially given the skyrocketing gasoline prices. Those soaring numbers would have skewed the results, which would have then showed self-checkout purchase dollars increases that would have been entirely a result of increasing prices.

As it happens, Buzek said, IHLs survey has never included pay-at-the-pump self-checkout figures because industry officials felt those numbers were well-documented and not needed.
A related factor, however, did impact the numbers. Self-checkout has gotten to be very popular at non-grocery chainsincluding Home Depot, Lowes, Wal-Mart and BJs Wholesale Club. Those chains tend to have much higher dollar purchases, and that helped pushed the average transaction size from $25 in 2004 to $35 this year, Buzek said.
IHL examined the increasing use of self-service kiosks where payment is accepted: self-checkout systems, ticketing kiosks, check-in kiosks, food ordering and postal kiosks.
"Kiosks are fundamentally changing the way consumers do business," Buzek said. "Among retailers, we are seeing anywhere from 15 percent to 40 percent of all purchases are made at self-checkout machines. Usage is even more impressive at airports, where some airlines estimate that near 80 percent of passengers are avoiding the traditional check-in process and instead using self-check-in machines."
A technology vendor thinks customers should be scanning their own items and saving the cashiers time. Is that a good idea? Click here to read more.
The IHL study pointed to several factors influencing the increases, but perhaps the least expected factor is an increase in the number of customers who speak little or no English.
"In areas that are predominantly multilingual, the kiosk is the thing that can help get the order right," Buzek said, referencing French speakers in some Canadian provinces and Spanish customers in many urban areas, especially those near the Mexican border.
Post-office kiosks are "extremely popular," and one reason is that they provide an alternative to long lines with civil service employees on the receiving end, Buzek said.
But the biggest factor in the increase is that customers are getting more comfortable with the technology and are therefore much more willing to use it. That is especially true among frequent fliers because many use airport self-checkout ticket kiosks. "Women are 250 percent more likely to use [retail] self-checkout kiosks if they have already used one at the airport," Buzek said. "Men are only about 150 percent more likely." He said thats likely because men are generally more inclined to experiment with self-checkout.
"Consumers have become much more savvy. Their time has also become more valuable and limited, and self-service is one way they can speed along their buying experience," Buzek said. "Retailers and other businesses are finding that self-service kiosks can significantly increase customer loyalty, as well as customer satisfaction."
Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com.
Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.